Tuesday, 23 October 2012

CPA predict growth but not until 2014

Last week the Construction Products Association released their latest construction industry forecasts and predicted that the construction industry overall will return to growth in 2014 after falling 6.3% in 2012 and a further 1.4% in 2013.

Total private sector construction work will fall 4% in 2012 but rise by 15% between 2012 and 2016. By 2016, private housing starts could total 136,400.

Sadly they also predict that total housing starts in Great Britain will reach only 118,000 this year. This is less than in 2011 when the figure was 129,370.

The CPA stated that until growth is seen in the whole sector, construction activity will decline by almost £8.5 billion.

Commenting on these forecasts, Noble Francis, Economics Director at the Construction Products Association, said: ‘Construction is currently experiencing sharp falls, both for orders and output as a result of severe cuts in the government’s capital spending, coupled with a very subdued private sector recovery. Construction has already lost £4.5 billion of work this year as the industry returned to recession for the third time in five years. Prospects for the industry going forward are bleak.

‘Although growth is expected in 2014, the next 12-18 months are likely to cause considerable pain to an industry that is already reeling from a prolonged decline. Considering how important construction is to the economy as a whole, and how many times government has stated that construction is essential for recovery, these latest forecasts will do nothing to improve confidence in the UK economy.

‘With the Autumn Statement less than two months away, it is imperative that government prioritises its spending by switching from current spending to capital investment for essential housing and infrastructure, as well as sorting out the long overdue model for drawing in private investment into construction. Otherwise, rather than driving economic growth in the near term, construction will keep the UK economy flat-lining as it has been for the past two years.’